Friday, April 2, 2010

It is becoming increasingly clear that Washington and Wall Street are in dire need of a--whats a polite way of saying this?---amelioration? It is inevitable that there will be a 'bloodletting' in both locales--it is just a matter whether this will happen through positive and comprehensive reform or-as mankind has habitually demonstrated--by way of self-induced razing. Unfortunately history has favored the latter alternative. Robert Reich exposes the Fed's malfeasance and condescension in this recent blog.

2 comments:

The changes we need will not happen through "reform". The Federal Reserve Act, hailed by progressive like William Jennings Bryan as a populist reform for democratizing money, actually brought Wall Street more control over the system. It is still the same today, a prime example of regulatory capture and rent seeking. At least with the banking panic of 1907, Wall Street was on its own.

As James Grant once said, monetary systems only last for so long. Politicians under the 'progressive' guise, gradually abolished the gold standard for a fiat currency. Now that people are realizing again that ultimately politicians cannot be trusted with stewardship of their currencies, the era of fiat currencies will eventually come to an end.